Raffaele Huang and Asa Fitch of The Wall Street Journal tell its readers about how geopolitical battles are causing headaches for tech giant’s supply chains. They write:
New U.S. export controls may compel artificial-intelligence giant Nvidia (NVDA) to cancel billions of dollars in next-year orders for its advanced chips to China, a move that could deprive Chinese tech companies of crucial AI resources.
The Santa Clara, Calif.-based company had already finished delivering orders of its advanced AI chips to China for this year, according to people familiar with the matter, and was pushing to deliver some 2024 orders in advance before the new rules were scheduled to come into effect in mid-November.
Then the U.S. government told Nvidia in a letter last week that the new export restrictions on the sale of high-end chips to countries including China were instead effective immediately.
China’s biggest AI and cloud-computing companies including Alibaba Group, TikTok owner ByteDance and Baidu had made large orders for delivery next year, the people said. Orders from major Chinese companies for 2024 exceeded $5 billion, one of the people said. […]
Analysts at Bernstein Research estimated in a report last week that using Nvidia’s V100, a less-capable AI chip launched in 2017, would lead to 30% higher costs to train AI systems as it requires more chips and thus consumes more energy.
Chinese companies have started sourcing homegrown chips, including Huawei Technologies’ Ascend 910 and Cambricon Technologies’ Siyuan 590.
The founder of Chinese speech-recognition company iFlytek said in August that Ascend had achieved capabilities and performance comparable to Nvidia’s A100. However, U.S. rules have barred leading foundries such as Taiwan Semiconductor Manufacturing, or TSMC, from manufacturing many of these chips.
Other Chinese companies such as Baidu and Alibaba have also developed their own AI chips and are counting on better algorithms and software to achieve higher performance with less advanced chips, The Wall Street Journal has reported.
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